New York Markets After Hours

Quest Diagnostics' quarterly profit falls 5.1%

MelodieWarner

Quest Diagnostics Inc.'s
DGX, -1.08%
third-quarter earnings fell 5.1% on restructuring and other charges, while declining clinical-testing revenue continued to hurt the company's top line.

The company also trimmed the high end of its full-year earnings guidance by five cents, now expecting per-share earnings between $4.45 and $4.55, and cut its revenue growth projection to 0.5% from its July forecast of 1% to 2%.

The largest diagnostic-testing company in the U.S. has seen its revenue growth challenged by consumers continuing to cut back on doctor-office visits amid high unemployment levels and a slow economic recovery. But the company's profits have generally improved in recent quarters, partly due to ongoing cost cuts.

Quest said last week it planned to eliminate 400 to 600 management positions by the end of 2013--saving the company about $65 million--as it moves to restructure itself into two new business groups: Diagnostic Information Services and Diagnostic Solutions. The company already launched a restructuring initiative last year to reduce its costs by $500 million over the next three years to help it meet profit targets.

Quest Diagnostics reported a profit of $163.1 million, or $1.01 a share, down from $171.8 million, or $1.07 a share, a year earlier. Excluding items such as restructuring, integration and chief-executive-succession cost, per-share earnings were flat at $1.18. Revenue dropped 2.9% to $1.85 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of $1.18 a share on revenue of $1.91 billion.

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